A year or so ago, an FC Barcelona executive gave a tour of the Catalan megaclub’s recently opened offices in Midtown Manhattan. This was a business office, he proudly declared, to help the club monetize the American market, where its fan base was vibrant and affluent.
Then, casually, he declared that it was Barca’s objective to increase its turnover to a billion euros per year by 2021. What did it stand at now? “Close to 700 million euros,” he said.
Actually, per Deloitte’s annual Football Money League analysis of the most profitable soccer clubs in the world, it was 648 million euros in the 2016-17 season — good for third place globally, behind Manchester United and archrival Real Madrid.
Barca, in other words, planned to grow its business by more than 150 percent in just four years. Had an executive of a 118-year-old company in any other industry made such a proclamation, you’d have laughed in his face. But these are boom times in professional soccer.
It’s plainly apparent in the weekly shattering of transfer records during most every transfer window. Last summer, Neymar became the world’s most expensive player by a factor of two with his $276 million fee — smashing a record that had stood for just a year. Since then, two other players have been sold for figures that would have been world records in 2016 as well. Of the 20 most expensive transfers ever, nine have happened in the last year and a half.
But this boom goes far beyond the hyperinflation in the transfer market.
Because there is real money being made to back those transfers. It isn’t a bubble. Until somebody decides that television rights to behemoths like the Premier League and Champions League are worth less today than they were yesterday, that is, although that has never yet happened.
A pair of studies underscores this steady upward climb. The aforementioned Deloitte Football Money League standings, released this week, found that 45 percent of revenue for the 20 highest-earning clubs in the world, all of whom are European, does indeed come from television rights. But 38 percent comes from “commercial” pursuits such as sponsorship and spin-off businesses. While a mere 17 percent comes from game-day activities. Such as, you know, selling tickets for people to come and watch soccer games and, presumably, prize money.
Those 20 richest teams — or highest-grossing ones anyway, since soccer’s large sugar daddy population has made it hard to tell who is worth what, exactly — pulled in a cumulative $9.8 billion last season alone. Just United, Barca and Real earned some $2.5 billion.
Less than a quarter of a billion dollars in takings from a single season doesn’t even get you into that top-20 anymore. That means that the barrier to entry to that exclusive club has jumped 16 percent in a single year. And it is double what it required to make the top-20 as recently as 2010.
Now consider that when Deloitte first put out its survey, for the 1997-98 season, United had the highest revenue in the world with a mere $125 million. Last season, the Red Devils were on top again, only this time with $840 million in revenue. That’s more than six times as much revenue, by the way, in the span of just 20 seasons. And it was a record. Just like every year sets a new record.
The rich are getting richer.
The other study, commissioned by UEFA, soccer’s European governing body, says much the same. Arsenal now commands an average ticket price of $125. And that the dozen richest teams in Europe alone earn $3 billion annually in sponsorship alone.
Transfers in Europe were just shy of $7 billion in Europe last summer, way more than double the sum half a decade earlier.
The rich are getting richer.
In the introduction of the report, admittedly put together by UEFA itself, meaning it certainly has a horse in the race — if not all of them — it claims staggering annual growth. “Few, if any, activities come close to matching the continuous 10% year-on-year growth in revenues that European club football has generated since the turn of the century,” it reads. “This is a testament to the underlying strength and depth of existing supporter loyalty and the ability of clubs to reach out to new supporters. Everything depends on this: the continuing growth in TV revenues and the accelerating growth in sponsorship and commercial partnerships are all business arrangements predicated on accessing the end ‘customer’, namely the huge pool of football supporters.”
To put that in perspective, even the booming Chinese economy could only match double-digit growth in its very best years. And it hasn’t since 2011.
So how did all those riches come about?
Soccer is a global sport. The only truly global sport. The world’s only common language. Yet for its worldwide appeal, it long remained a parochial sport. Clubs simply weren’t very good at exploiting an infinite market. Even the biggest teams often had no earthly idea for how to monetize their popularity, how to build a system for cashing in on their brand and their success. There was usually no business infrastructure to speak of.
The upward trend-line coincides exactly with clubs turning into businesses. It’s easy to lament that, as the commercialization of the game has sometimes stepped on its essence and soul. And while the rising tide has lifted all boats, it has lifted some much higher than others. The gap between the game’s uber-wealthy and merely very-wealthy gets bigger by the year. Yet the sport has turned into an enrichment machine all the same.
It’s pretty simple now. You open a business office in Manhattan. Or you get left behind.
Leander Schaerlaeckens is a Yahoo Sports soccer columnist and a sports communication lecturer at Marist College. Follow him on Twitter @LeanderAlphabet.